ACP Magazines Pty Ltd v Motion

[2000] NSWSC 1169

CITATION:	ACP v Motion [2000] NSWSC 1169 revised - 14/12/2000
CURRENT JURISDICTION:	Civil
FILE NUMBER(S):	SC 50160/1999
HEARING DATE(S):	08/12/00
JUDGMENT DATE:	13 December 2000
PARTIES :	ACP Magazines Pty Limited - Plaintiff/Respondent John Motion - First Defendant/Applicant Southdown Publications Pty Limited - Second Defendant/Applicant
JUDGMENT OF:	Rolfe J

COUNSEL :	Mr S.J. Gageler SC - Defendants/Applicants Mr K.L. Andronos - Plaintiff/Respondent
SOLICITORS:	Blake Dawson Waldron - Defendants/Applicants Gilbert & Tobin - Plaintiff/Respondent
CATCHWORDS:	Costs - refer attached for details.
LEGISLATION CITED:	Supreme Court Rules Evidence Act 1995 Supreme Court Act 1970
CASES CITED:	Law Society of New South Wales v Jackson [1981] 1 NSWLR 730 Darcey v Pre-Term Foundation Clinic & Anor [1983] 2 NSWLR 497 Danieletto v Khera (1995) 35 NSWLR 684 Leicester v Walton (Court of Appeal - 22 November 1995 - unreported)
DECISION:	CPH Property Pty Limited pay defendants/applicants' costs of Notice of Motion of 9 November 2000 incuding costs of the argument in relation to the payment of costs.

COSTS
Documents were produced to the Court by the solicitors, who had formerly acted for a company, pursuant to a subpoena. The company opposed the granting of access to the documents to the party subpoenaing them on the basis of client professional privilege.

A Notice of Motion was taken out to obtain access to the documents and was opposed initially. When further evidence was obtained a number of documents in respect of which access had been denied were voluntarily furnished, the claim for privilege not being pursued. This satisfied the Notice of Motion and the applicants sought that it be dismissed with costs. The company opposed an order that it pay the costs on the bases that it was not a party to the proceedings and hence not amenable to an order for costs by virtue of Part 52A rule 4.

Held:
(i) That by appearing in the proceedings and either seeking to maintain the claim for privilege or opposing the order sought in the Notice of Motion, the company became a “party” within the inclusive definition in the Supreme Court Act, as it sought a determination on those issues from the Court and hence a claim for relief, and was thus amenable to a costs’ order.
Law Society of New South Wales v Jackson [1981] 1 NSWLR 730 followed
Darcey v Pre-Term Foundation Clinic & Anor [1983] 2 NSWLR 497; Danieletto v Khera (1995) 35 NSWLR 684 and Leicester v Walton (Court of Appeal - 22 November 1995 - unreported) considered.

(ii) That as a matter of discretion the company should pay the costs.

I N D E X

PARA

Introduction 1

The Submissions On Costs 11

A Consideration Of The Submissions 19

Conclusions 52

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

ROLFE J

WEDNESDAY, 13 DECEMBER 2000

50160/1999 - ACP MAGAZINES PTY LIMITED v MOTION & ANOR

JUDGMENT

HIS HONOUR:

Introduction

1    By a Notice of Motion filed on 9 November 2000, the defendants, for whom and which Mr S.J. Gageler of Senior Counsel appeared, sought an order that access be granted to them of certain documents produced pursuant to a subpoena addressed by them to Allen Allen & Hemsley. The documents were in three separate bundles marked “Not Privileged”, “Privileged” and “Privileged Subject to Instructions”. In particular, they sought access to drafts of a Deed brought into existence prior to the Deed dated 6 August 1980 between Australian Consolidated Press Limited, News Limited and Southdown Publications Pty Limited. Australian Consolidated Press Limited, which is now CPH Property Pty Limited, (“CPH”), and for which Mr K.L. Andronos of Counsel appeared, is neither a plaintiff nor a defendant in the proceedings. The plaintiff was made the respondent to the Notice of Motion. CPH was not.

2    Mr Mark Geoffrey O’Brien, the solicitor for the plaintiff, swore an affidavit on 15 November 2000, in paragraphs 3, 4 and 5 of which he deposed:-

“3. The documents produced by Allens are documents which appear on the Allens’ file in relation to their retainer to act for CPH Property Pty Limited … (formerly Australian Consolidated Press Limited) in relation to the negotiation of a Deed dated 6 August 1980 between CPH Property Pty Limited, Fox News Pty Limited .. (deregistered) (formerly Southdown Publications Pty Limited) and News Limited .. (Deed).
4. I have instructions to act for CPH Property Pty Limited in respect of the subpoena addressed to Allens.
5. I am instructed by CPH Property Pty Limited that it wishes to claim client legal privilege over all of the documents produced by Allens to which privilege properly attaches.”

3    Mr O’Brien continued that certain documents did not appear to be privileged, being ones included in the third category to which I have referred, and that it was apparent from the documents produced by Allen Allen & Hemsley that the solicitor responsible for the carriage of the matter was Mr Bruce McWilliam, who now resides in England. In consequence Mr O’Brien sought information from Mr McWilliam, having furnished to him the original Allen Allen & Hemsley file, as a result of which he was told the matters set forth in paragraph 8 of his affidavit. In paragraph 9, he continued:-

“Based upon my inspection of the Allens file and my discussions with Mr McWilliam, I have formed the view that the only documents on the Allens file within the terms of the subpoena which are not properly subject to a claim for privilege are those referred to in paragraphs 2(i) and 6 above.”

4    On 16 November 2000, the Notice of Motion came before me. I gave a reasonably detailed judgment setting out what transpired, and I shall assume that the reader of this judgment has access to it. In it I noted that an important issue was the extent to which the defendants are entitled, if at all, to have access to the documents in respect of which the claim for privilege was maintained. I referred to Mr O’Brien’s affidavit and to various matters not in issue. I expressed the view that whilst the method Mr O’Brien had adopted to seek to resolve the question of documents to which client professional privilege attached may have been satisfactory in some circumstances, in this case, because of the necessity to have regard to the terms of the Deed into which the parties ultimately entered, it was not, and that if the claim for privilege was to be maintained “then it must be on proper evidence which does not leave any room for doubt as to what Mr McWilliam was conveying to Mr O’Brien”. I was also of the view that the defendants were entitled to have an affidavit from Mr McWilliam setting out his version of the status of the various documents.

5    I concluded by saying that the affidavit of Mr O’Brien did not satisfy me that the claim for privilege had been made out, and that I had afforded Mr Andronos the opportunity of either putting on further evidence or dealing with the matter on the basis of Mr O’Brien’s affidavit. After taking instructions he elected to put on further evidence and, in those circumstances, I gave directions as to when that should be done, and listed the matter for mention on Monday, 27 November 2000. I expressed the hope that the parties may be able to resolve the issue. On the substantive points they did. On the question of costs they did not.

6    On 23 November 2000, Mr McWilliam swore a detailed affidavit dealing with twenty eight documents in the Allen Allen & Hemsley file.

7    The solicitor for the defendants, Ms Alison Dorne Biscoe, swore an affidavit on 1 December 2000. She stated that on 16 November 2000 she was furnished with two draft Deeds, being, she believes, the documents numbered 13 and 14 in paragraph 9(b) of Mr McWilliam’s affidavit. On 24 November 2000, she received under cover of a letter from the solicitors for the plaintiff, a copy of Mr McWilliam’s affidavit, further copies of the two draft Deeds numbered 13 and 14, and copies of a further two draft Deeds and the executed Deed, which she believes are the documents numbered, 11, 12 and 28 referred to in paragraph 9(b) of Mr McWilliam’s affidavit. The solicitors for the plaintiff advised her that CPH was no longer maintaining a claim for privilege in respect of the documents numbered 11, 12, 13, 14 and 28, save as to handwritten notations on the documents numbered 13 and 14.

8    On 30 November 2000, Ms Biscoe received from the solicitors for the plaintiff copies of four further documents, being those numbered 21, 23, 26 and 27 referred to in paragraph 9(b) of Mr McWilliam’s affidavit. She deposed:-

“Gilbert & Tobin advised without prejudice to any right, claim or contention, that CPH Property Pty Limited no longer pressed a claimed privilege over those documents.”

9    She continued that since receiving copies of the drafts of the Deed referred to in paragraphs 4, 5 and 6 of her affidavit, the defendants had instructed her not to proceed further with the Notice of Motion of 9 November 2000, and that they sought an order that CPH pay their costs of it as agreed or taxed. No order for costs was sought against the plaintiff.

10    On Friday, 8 December 2000, the matter came before the Court, the issue being whether CPH should pay the defendants’ costs of the Notice of Motion. It was not in issue that the defendants had, by pursuing the Notice of Motion, obtained access to more documents than CPH was originally prepared to produce or, to put it another way, that by pursuing the Notice of Motion and by obtaining the direction that evidence be filed from Mr McWilliam, a situation had been reached in which the claim for privilege made originally was not pursued. In these circumstances, subject to the submissions made by Mr Andronos, the prima facie position seemed to be that the defendants were entitled to their costs of the Notice of Motion.

The Submissions On Costs

11 I think it important to bear in mind that CPH was represented by the solicitors for the plaintiff pursuant to the instructions to which Mr O’Brien referred, and that Mr Andronos was retained to appear for CPH. In his written submissions of 16 November 2000, Mr Andronos asserted that the documents to which the defendants sought access were the subject of client professional privilege and, accordingly, protected from disclosure pursuant to Part 36 rule 13 of the Supreme Court Rules and Part 3.10 of the Evidence Act 1995. The submission continued that CPH objected to those documents being inspected by the defendants or their legal representatives “and presses its claim for privilege”.

12    After setting out a description of the documents, the written submissions asserted that each of them was either a confidential document prepared by Mr McWilliam for the dominant purpose of providing legal advice, or reported a confidential communication between Mr McWilliam and officers of CPH. The submissions dealt with the privilege thereby attaching to the documents and relied upon what Mr McWilliam had stated to Mr O’Brien.

13    There was a further submission that the onus was on the defendants to prove that the privilege had been waived as to which there was no evidence. Mr Gageler submitted that the evidence did not establish the claim for client professional privilege. This was a submission with which I prima facie agreed, although I afforded CPH the opportunity, if so advised, to put on further evidence from Mr McWilliam. The result of this further consideration was that a number documents, for which privilege was then claimed, was no longer maintained.

14    The subpoena is an order by the Court requiring the subpoenaed party, relevantly for present purposes, to produce documents. However, it is not an order made after judicial consideration, but rather one made by the Court on the application of the party seeking its issue. The Court’s supervisory role over subpoenas arises when documents are produced or not produced. At the moment, I am concerned with the situation where documents are produced.

15    Where, as in the present case, documents are produced by solicitors, there is no entitlement in the solicitors to waive any client professional privilege attaching to them. It is not unusual for solicitors to produce documents to the Court and make a claim for that privilege, which it is then a matter for the client to take up if the existence of that privilege is to be asserted. Sometimes that claim for privilege is argued by or on behalf of the client separately from either of the parties, and sometimes it is argued on behalf of the subpoenaed person by a party to the proceedings. Similar situations often arise in circumstances where an application is made to set aside a subpoena as constituting an abuse of the Court’s process.

16    In relation to claims for client professional privilege, the existence of the privilege is often determined either by the trial Judge or, if the parties so request, a Judge not hearing the matter, by a simple inspection of the documents without evidentiary assistance. From time to time, it becomes necessary for there to be evidence to establish the basis on which the privilege is claimed, as occurred in the present case.

17    Usually, in the former type of case no issue as to costs arises. The reason seems to be that the parties accept that the judicial determination on privilege is part and parcel of the overall litigation and, once again, usually, there are no additional costs to the parties of a Judge’s inspecting the documents. Equally usually, when there is a dispute as to whether privilege is properly claimed or the subpoena constitutes an abuse of the Court’s process an order for costs is made in favour of the successful party. Costs’ orders, in my experience, have always been made without any argument as to the jurisdiction of the Court to do so. Submissions as to the proper way in which the Court should exercise its discretion in relation to costs are, however, often made.

18    CPH contends that the Court has no jurisdiction to make an order for costs against it in respect of the Notice of Motion because it is not a party to the proceedings. The defendants do not accept this. Their basic submission is that by participating in the proceedings for the purpose of trying to obtain a determination favourable to it in relation to the claim for privilege, CPH became a party to the proceedings, relevantly for the making of an order for costs, and it should therefore be ordered, after a proper consideration of the discretionary issues CPH has raised, to pay the defendants’ costs of the Motion.

A Consideration Of The Submissions

19 Section 76(1) of the Supreme Court Act 1970, provides:-

“76(1) Subject to this Act and the rules and subject to any other Act:-
(a) costs shall be in the discretion of the Court;
(b) the Court shall have full power to determine by whom and to what extent costs are to be paid; and
(c) the Court may order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on an indemnity basis.”

20    The cornerstone of CPH’s submissions is Part 52A rule 4, sub-rule (1) of which provides that the powers and discretions pursuant to s.76 “shall be exercised subject to and in accordance with this Part”.

21    Sub-rule (2) provides that subject to sub-rule (5), the Court shall not, in the exercise of its powers and discretions under s.76, make any order for costs “against a person who is not a party”.

22    Sub-rule (3) provides that subject to certain rules, a person shall not be made a party for the purpose of making an application for costs against that person, and sub-rule (5) provides:-

“Sub-rule (2) shall not limit the power of the Court to make any order:-
(a) under rule 43 or Part 42 rule 7(f); (sic)
….”

The parties agreed that this should read “Part 42 rule 7(1)(f)”.

23    CPH’s essential submissions were that it did not become a party to the proceedings by virtue of its seeking a determination from the Court that it was not obliged to grant access to certain documents because client professional privilege attached to them. Rather, CPH put the submission that it did not become a party to the proceedings, not for the reason to which I have just referred, but because the defendants were the moving party challenging the claim of such privilege. The significance, as CPH saw it, of this submission was that it did not seek to play any part in the proceedings by seeking any relief in its favour because the claim of privilege, in itself, was a sufficient basis not to produce the documents.

24    I propose to dispose of this submission immediately. The claim for privilege was one the defendants were entitled to challenge. The challenge having been made, the obligation was, in my opinion, on CPH to justify the claim. It is unthinkable that a party could make a claim for such privilege and, because the claim is tested and, in the circumstances of the present case, essentially contested successfully, the party seeking to maintain the claim for privilege could assert that it was not seeking a determination of the Court favourable to its view. This becomes more obvious when it is appreciated that CPH, at least implicitly, accepted that the onus was on it to make good the claim for client professional privilege. Whilst its submissions, in the present case, did not necessarily reflect this situation, the position is that Mr O’Brien in his initial affidavit sought to make that claim good and CPH, when offered the opportunity to provide further evidence to do so, accepted it and filed the affidavit of Mr McWilliam.

25    Accordingly, one has the position where CPH, although not a named party to the proceedings, made an initial claim that it was not obliged to grant access to documents on the ground of client professional privilege and, thereafter, when that claim was challenged, sought to make good the proposition that that privilege attached to the documents.

26 “Party” is defined in s.19 of the Supreme Court Act as:-

“Includes any defendant and any person against whom a claim for relief is made under s.78.”

27    “Claim for relief” is defined as including a claim for a declaration of right or a claim for the determination of any question or matter which may be determined by the Court. There is no doubt that a claim for client professional privilege is one which the Court can determine.

28    Section 78 provides, subject to sub-s.3, that the Court may grant to the defendant in any proceedings all such relief against any person as the Court may grant against that person if the person were a defendant in separate proceedings commenced by the defendant for that purpose, e.g. a cross-claim.

29    Mr Gageler submitted that the definition of “party” was inclusive and, of necessity, included any entity making a claim for relief in the proceedings.

30    Mr Andronos placed great reliance upon Part 42 rule 7(1)(f). That sub-rule is concerned with circumstances where the Court subpoenas persons to appear or produce documents and there is default in so doing. In those circumstances the sub-rule deals with the power of the Court to take compulsive action and to order the person in default to pay any costs occasioned thereby. The submission made by Mr Andronos was that this showed that the provisions of the Rules specifically dealt with costs’ orders capable of being made against subpoenaed persons, but without reference to the type of circumstance now before the Court.

31    In my respectful opinion, this submission must be rejected. Part 42 rule 7 is dealing with a completely different situation. Its concern is with a subpoenaed person, who does not appear and against whom proceedings for default of appearance are taken. It seems to me that there is no way that such a person could be described as a “party” to the proceedings. The person has refused to obey the Court’s order and the Rules are simply making it clear that in those circumstances, that person obviously not being a party to the proceedings, is not able to escape an order for costs by reason of Part 52A rule 4.

32    However, it seems to me, that the position with which I am confronted is one in which a subpoenaed party has sought from the Court an order or, to put it as Mr Andronos would prefer, has contested an application by the defendants for an order, for the granting of access to documents on the ground of client professional privilege and, to a not insubstantial extent, has failed. There would seem to be little doubt that if CPH had succeeded, it would have been entitled to an order for costs against the defendants, which are obviously parties to the proceedings, and which would have been held to have no basis for pursuing an order for access. Mr Andronos said that in those circumstances such an order would have been sought. It becomes quite strange, therefore, that having taken the position it did, CPH, having not been successful, albeit not as a result of any ultimate judicial determination, can have the luxury of disputing the defendants’ claim without, in the event of its failing, being obliged to pay their costs.

33    I shall refer to the authorities on the subject in their chronological order.

34 Mr Gageler relied upon the decision of the Court of Appeal in Law Society of New South Wales v Jackson [1981] 1 NSWLR 730. In that case the Council of the Law Society participated in proceedings before the Statutory Committee, although it was not, at least on one view and perhaps strictly speaking, a party. In the course of his judgment, Samuels JA, with whom Reynolds and Mahoney JJA agreed, said, at p.735:-

“A party, essentially, is a person who takes part in legal proceedings and that is the definition to be found in Jowitt’s Dictionary of English Law , at p.1302. It cannot reasonably be doubted that the council took part in these proceedings. The provision in s.77(1) about payment by any party of costs and, in particular, the words ‘any party’, seem to me able readily to accommodate any person or body who or which has taken part in the proceedings before the Statutory Committee to which the sub-section relates.
But the argument is that the Act and the rules distinguish between a party and the council and that the procedure contemplated produces the same discrimination. It is submitted that, while a complainant is a party and so is the solicitor, the council is not; unless it obtains leave to appear by dint of the incorporated provisions of s.7(2) of the Royal Commission Act in circumstances in which it might otherwise desire to protect or advance some independent interest of its own . Otherwise, it is contended that it merely appears by council and solicitors to assist the Statutory Committee even though, as in the great majority of cases, perhaps indeed almost all, the complainant, if there is one, plays no part at all in the proceedings before the Committee. I do not consider that these arguments have substance.” (My emphasis.)

Mr Gageler placed particular emphasis upon a party being one “who takes part in legal proceedings”, and the passage “in which it might desire to protect or advance some independent interest of its own” in the context in which those words were used.

35    He submitted that when one considered that the word “party” was an inclusive definition and when, as in the circumstances of this case, CPH had elected to instruct solicitors and counsel to argue for the point of view for which it contended with the intention of protecting or advancing its independent interest to client professional privilege, it clearly became “a party”.

36 Mr Gageler referred nextly to the decision in Darcey v Pre-Term Foundation Clinic & Anor [1983] 2 NSWLR 497, in which the Court was concerned with the inherent power of a magistrate under the Justices Act 1902 to make an order for costs in relation to an application to set aside a subpoena. At p.504, Hunt J said:-

“It would be manifestly unfair for a person upon whom a subpoena has been served, and who has successfully moved to have that subpoena set aside, not to have his costs of that application, just as it would be manifestly unfair for the party who issued the subpoena under s.61 for the production of the documents not to have his costs if the application to set the subpoena aside is unsuccessful. To deny the Court the jurisdiction to make such an order would be to encourage outrageous subpoenas such as the one in question here, and to bring the administration of justice into disrepute among right-thinking people .. .”

Whilst I respectfully concur with his Honour’s view, I think it better not to place reliance on that decision in this case, because it was one founded upon the terms of other legislation.

37 Mr Andronos relied upon Danieletto v Khera (1995) 35 NSWLR 684. That was concerned with the payment of reasonable costs to a person required to answer a subpoena. At p.685, Bryson J noted that the order of a Registrar did not deal with the expenses of the subpoenaed person, and his Honour added that the subpoenaed person was “not a party to the proceedings”. Shortly after he said that the terms of the order suggested that there may have been a misapprehension that the subpoenaed person “was a party to the proceedings or represented the plaintiff, in which case association of an order for his expenses with the outcome of the proceedings might be appropriate”.

38    That case was concerned with the payment of proper expenses. It does not seem to me that when that was the only issue, which arose under Part 37 rule 9 and expressly referred to a person not being a party, the decision has the effect for which Mr Andronos intended.

39    In my opinion, that decision has no relevance to the situation in the present case.

40    Finally, Mr Andronos relied upon the decision of the Court of Appeal in Leicester v Walton (Court of Appeal - 22 November 1995 - unreported).

41    That was a case in which a doctor was supported in litigation brought against him, no doubt pursuant to some insurance arrangement, by the United Medical Defence. Mr Pike was a solicitor employed by that organisation and the solicitor on the record for the appellant. Very late in the preparation of the proceedings he ceased to act for the doctor and this led to costs by virtue of the necessity for adjournment applications to be made.

42    At p.8, their Honours said that a fair solution would be that United Medical Defence pay the costs thrown away, and:-

“However it is not a party to the proceedings and, as will appear, not amenable to such an order.”

43    Their Honours then referred to s.76 and Part 52A rule 4. It seems to me, with respect, that there could be no doubt that United Medical Defence was not in any way a party to the proceedings. It stood behind the doctor for a period, but then ceased to do so. However, it sought no relief for itself in the proceedings, nor took any part in them.

44    Their Honours then turned to consider the question of whether the solicitor should be ordered to pay the costs on the basis that his action or inaction led to their being incurred. Ultimately, they concluded that that would not be a proper order to make in the circumstances of that case.

45    In my opinion that case does not deal with the situation which arose in the present case because, as I have said, United Medical Defence made no application to the Court, nor did it seek to resist any application before the Court, nor claim any entitlement to relief from the Court.

46    Mr Andronos submitted that there are a number of discretionary factors, which should cause the Court not to make the order for costs the defendants seek, if I did not accept the jurisdictional argument, which I do not. They are set out in paragraph 4 of his written submissions and include that CPH is a stranger to the litigation; that Allen Allen & Hemsley produced the documents to the Court; that CPH instructed his instructing solicitors “to act for it in relation to the claim for privilege in the subpoenaed documents”; that on 2 November 2000, CPH informed the defendants that privilege was maintained and that it could not determine whether privilege in any of the documents, which were file notes and drafts prepared for the dominant purpose of legal advice and prima facie privileged, had been waived; that on 9 November 2000 the present Notice of Motion was taken out; that thereafter Mr O’Brien took steps to communicate with Mr McWilliam; that on 16 November 2000 I directed CPH to provide further detailed evidence as to the basis of the privilege claimed, but did not order access to be provided to the defendants; that on 23 November 2000, Mr McWilliam swore an affidavit; that on 27 November 2000 a Motion was listed before me and CPH indicated that the matter was close to resolution; that on 30 November 2000 CPH provided further documents to the defendants and they indicated that they proposed to discontinue the Motion but nevertheless sought costs; and that on 1 December 2000 CPH was ready to argue the costs’ question, but it was stood over to 8 December 2000.

47    The submissions continued that these circumstances made clear that CPH’s behaviour was reasonable and appropriate and that the Motion was, at best, filed prematurely, that CPH had not been ordered to provide access to any documents over which it asserted privilege, and that the documents provided to the defendants, beyond which they do not now seek access, have been provided “unilaterally”.

48    Finally, and much was made of this, it was submitted that CPH has already been put to substantial expense by having to obtain instructions from Mr McWilliam, and that to visit a party’s costs on a stranger to the proceedings in relation to a claim, which has largely been accepted by the defendants, “would be irrational and unfair”.

49    If I may say so, with respect, this version places, not unnaturally perhaps, a strong gloss favourable to CPH on what has occurred. The simple facts are that CPH declined, on the basis of its claim for client professional privilege, to allow access to certain documents, to which, CPH now agrees, the defendants are entitled to have access. CPH was entitled, when the matter was before me on 16 November 2000, to have maintained the position based on the affidavit of Mr O’Brien. It must have been obvious that if that attitude had been adopted, there was a strong possibility that I would not have been satisfied that CPH had established that client professional privilege had been made good, save to the extent to which I referred, and access would have been granted. When the matter was referred to Mr McWilliam it apparently became clear that there were further documents in respect of which CPH was not able to claim privilege. This led, quite properly, to those documents being made available to the defendants. None-the-less, on the facts before me, that result was achieved only after a Notice of Motion was taken out to enable the defendants to obtain access to the documents, which Notice of Motion was originally opposed. That the defendants, properly advised of the situation by Mr McWilliam’s affidavit, did not further pursue the application, does not mean that they were not essentially successful. Nor does the fact that there was a voluntary provision of the documents after there was a contested hearing on 16 November 2000, when it was made clear to CPH that it should have the opportunity to rely on further evidence, if so advised, and that evidence was obtained, lead to the conclusion that no order for costs should be made.

50    I am not satisfied that the defendants took out their Notice of Motion prematurely. As I have said, when the Notice of Motion came on for hearing it was contested. There was no application that it should be adjourned while CPH considered its position further, or at least there was no such application until the difficulty of CPH’s position, as I perceived it, was made clear.

51    I am not impressed by the fact that CPH was put to expense, particularly when it is borne in mind that a result of that happening was that it resiled from its initial position.

Conclusions

52    In the result I am of the view that for the purposes of the Act and Rules CPH, in the circumstances of this case, was a party to the proceedings and thus amenable to an order for costs. It participated in them for the purpose of seeking a determination favourable to it. If I am wrong in this view the matter should be referred urgently to the Rule Committee for consideration as to whether a subpoenaed party, which wishes to argue that access to documents should not be given to the other party or that a subpoena should be set aside as an abuse of process, should not be deemed to be a party to the proceedings a nd thus placed in the same position as the party seeking access to such documents or resisting an application that the subpoena constitutes an abuse of process in the event of its not being successful. Not to have mutuality in relation to costs in these circumstances leads to the same type of conclusions to which Hunt J referred in Darcey.

53    I am also of the opinion that in the circumstances of this case the proper exercise of discretion demands that CPH pay the defendants’ costs of the Notice of Motion of 9 November 2000, which costs should include the costs of the argument in relation to the payment of costs.

54    I invite the parties to bring in Short Minutes of Order on Friday, 15 December 2000 to give effect to these reasons and also for any further orders or directions required for progressing the matter.

__________

Last Modified: 12/14/2000